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Tuesday, December 1, 2015

Shell Waterton holds open house in Twin Butte

Shell's Patty Richards and Rod Sinclair

Chris Davis

Shell Waterton held an open house event at the Twin Butte Community Hall on Thursday evening, November 26.  Shell solicited input from area residents, shared information about upcoming plans related to Shell Waterton, and provided a lasagna dinner.  Several Shell representatives were available to talk to people.  Representatives of Definitive Optimization Ltd. were on hand to discuss their oil and gas well optimization  technology. Dexter Oilfield Inc. brought their environmental air monitoring vehicle, and allowed people to have a look inside.


"We just want to share what our current Shell activities are in the upcoming year," explained Rod Sinclair, Sinclair is the community affairs coordinator for the Shell Waterton Complex.  "Overall, it's to see if folks have any questions about Shell, any questions, or concerns, anything we need to know about, in this kind of forum we can get that information a lot of times. You don't get everybody phoning you everyday about issues, so this creates that opportunity."

Dexter Oilfield Inc.'s air monitoring vehicle at Shell Waterton event
"It is also a chance to introduce staff to the local public, putting a face to the name."  One of those relatively new faces is Shell Waterton Operations Manager Peter Argument, who was also in attendance at the event. "We are hoping he stays in seat for some time, but typically a three year stint is normal, within bigger corporations,"  said Sinclair, who further explained that Shell employees may stay with the company for many years, they will often move to new positions as their experience expands. "That's how the company grows, sharing that knowledge and experience.  We try to keep some continuity, with myself for instance, in community affairs."

Various displays around the room illustrated Shell Waterton's reclamation , licencing, and development plans, as well as environmental protection initiatives.

"There is our new environmental licencing application that we're putting in," said Sinclair, pointing out one of the displays.  Shell Waterton plans to drill  one well in 2016 "In what we call the south field, which is south of the Waterton Complex. We have a surface location picked, and we have a lease agreement with the landowner for that surface location. The next thing is to consult with all the folks in the area that the regulator requires us to consult with, and once we get their feedback, There are specific people within a certain radius of the project that the regulator requires you to go face to face, sit down consultation. Notification, there is a number you need to notify also, and all of that has been done. It's getting the feedback from them and whatever the issues or concerns might be. Then we figure out what would do or can do to mitigate those. Then we feed that application back to the regulator and to the stakeholder, and if it's satisfactory enough hopefully the regulator gives us us the licence to drill, and we go ahead with the project."  Sinclair said the November 26 event was one informal aspect of the public consultation process.  According to Sinclair, he's been with Shell Waterton "Since before the Red Sea got sick."

Sinclair also offered a rough timeline for the proposed project.  Shell will apply to the regulator in January 2016, and if approval is granted will construct from May to June and begin drilling in July, "and the whole project would be completed in early to mid December." If this plan succeeds, the new well will be operational before the end of 2016, "Tied in and producing."

"In 2017 we have plans of drilling another well up Screwdriver Creek, on an existing lease where we already have one well drilled."

In May of 2015 Argument and Sinclair updated the Town of Pincher Creek's Committee of the Whole about Shell Waterton's plans going forward (click here for that story).  "We are reconvening, and giving a Town Council an update December 2," said Sinclair.  That delegation will be composed of  Patty Richards (Shell Canada Social Investment Manager) and Peter Argument. "It's just bringing them up to speed on our development plans, and what that means to the life of Waterton here, and our expected end of life."


I asked Sinclair what his own plans might be going forward.  In addition to his work with Shell, he has a thriving photography business, Sinclair Imagery Inc.  "I will have a full 35 years in with Shell the end of next year, so my plan for sure is get my 35 in, and assess it then and see what the next steps are for retirement." He emphasized he enjoys his work and working for the company. "At the same time, I want to do more photography. If everything lines up, that may well be what I do in the next year or two."

Sinclair often represents Shell Waterton's social investments in the Pincher Creek area.  "We have a limited budget. $100,000 annually is what we are able to invest into social investment causes in the community."  Recently Shell Waterton donated $25,000 in the Windy Slopes initiative to upgrade the Pincher Creek Health Centre Emergency Room. "That really makes sense to us to invest in that because everybody within the community at some point, directly or indirectly, is going to need those services."

"We are real advocates of the (Pincher Creek and District) Ag Society, a lot of the members of the Ag Society are our stakeholders, and our key stakeholders are rural people. That is where our wells and pipelines and plant and number of facilities are. People in the town are stakeholders also, it's not like they are exempt, but our direct impacts are more on the rural folks. So the Ag Society and 4-H are a couple of organizations that make good sense."

Other recent social investments were granted to the Adult Learning Centre (a library), and St. Michael's School (a digital scoreboard),  along with other small donations. "It all adds up to $100,000. I don't think there's another corporate organization here in the community that's annually donating $100,000 in sponsorship."

I also discussed Shell Waterton's projected closure with Sinclair.  "We are right now forecasting the late 2020s, maybe, if everything goes well, early 2030s," said Argument to the Committee of the Whole meeting in May.  "It's going to impact our community," said Sinclair at the November 26 event.  As technology changes, maybe we can push that (time-frame) out.  These wells, if we can drill them and they are successful, that helps push that out."

The global downturn in the energy industry is a factor that certainly affects Shell. "Shell Waterton is within the Foothills organization, which is within the old upstream unconventionals organization, which is in Royal Dutch Shell, globally. So when you look at it globally, we are a very, very, tiny little piece within the whole bigger business. And we are competing with all of the other parts of the business for money. Especially in these economic times with the price of oil."

"The business could very quickly decide to regress somewhere else, too. Hopefully that doesn't happen and we can keep this place going for our community."

Definitive Optimization Ltd. booth
I also spoke with Terry Lavinsky of Definitive Optimization Ltd.  Lavinsky and Terry Koch were demonstrating the company's services.  Shell is a major customer for the company.   It's a Canadian employee-owned company which began in 2009, and the equipment is manufactured in Brooks, Alberta.

"We take the oil companies wells that their having trouble with flowing, liquid loading, and things like that," explained Lavinsky.  "We put plunger lifts in them, and unload the fluids so the well will produce more gas."

Plunger lift technology
"This technology has been around for a number of years."  According to Lavinsky the technology results in a significant increase production by ensuring less gas is lost to the extraction process. "There is a lot of work that goes into it," he said, mentioning installation, maintenance, and operation of the technology.  "We do all of Shell's work,"

As for the downturn in the oil and gas industry, Lavinsky said "The oil and gas producers have to spend their money somewhere, they have to optimize and invest in the wells they have, so this is one of the technologies they can use on wells that they have right now, by putting the plunger lifts in, making more gas, more production with what they have, versus the costs of drilling a new well."


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